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Sunday, September 21, 2008

Sales compensation: Some observations

In email exchanges yesterday, consultant Tim Nagle offered some additional observations on the sales model he found worked best for him when he built the Richmond VA Champion Windows and Doors branch to nation-leading levels.

He said his salespeople worked for 100 per cent commission, but these were not slouchers.

In home improvement sales it is widely known that only the top 10% make $100,000 or more. I had a sales office that 80% made $100,000 and the other 20% made over 200,000. Two of my reps were top 5 nationally. There is plenty to discuss in this situation.
Absolutely: You might wonder how you can attract -- and retain -- this type of high producing sales force.
How do I attract people to hire?
It all starts first by building that "culture" in the office/business. I focus on one successful model (person) and move to the next. I build it one at a time and use that to my advantage. One attracts the next.
If you aren't hiring someone " you are not looking hard enough!"
How do I attract them and how do they want to come aboard?
MY passion and willingness to make them successful and being a great leader. They feel my passion and know that I will work to make them successful.

How do I deal with the "primadonna's?"
Leadership skills, firmness and keep them motivated & in check by constantly raising the bar. They are too busy and fear losing that position, because I am never satisfied. (understand what I mean?) It is a mental challenge I put them through!
The model for direct-to-consumer sales of simple products probably doesn't apply for you if you are selling higher-end technical or AEC services, where expertise and accomplishment (and often professional credentials) are essential. You don't generally choose a lawyer by talking to a commissioned sales rep; nor would you hire an architect. As well, you should consider Nagle's important point: the business culture really counts.

Education levels may be important -- If your sales opportunity requires more the natural sales/persuasive ability than real professional/technical knowledge; if your clients are middle class and lower-middle class consumers rather than postgraduate degree holders, your sales team may have just a basic high school or technical education with limited earning/income opportunities in non-sales careers. Then, you can manage/motivate them with high paying work on commission. The sales cycle length is also important

You may wish to review this earlier posting: Sales: What are you paying for?

1 comment:

sales compensation said...

Since February I have been advising my clients to review their comp plans and see where they can increase non-cash incentives. This tends to build have an interesting synergy in the comp plan.